HMRC forms: Frustration and confusion
The future of UK tax is online – or so HMRC would like us to believe. All new HMRC forms must be completed online, and many of the old paper forms are being replaced with new online versions.
Apparently there is a HMRC working group which is responsible for producing the new HMRC forms, but there is no evidence that this group thinks about the needs of tax agents when designing those new forms.
This lack of “customer input” (tax agents are HMRC’s customers as much as taxpayers), is creating problems for accountants who are paid to deal with HMRC forms for their clients. The issues I have identified so far include:
Most of the new interactive PDF forms only allow you to move forward to the next page of the form after all the required information is completed on the earlier page. This means the form can’t been viewed in its entirety before the completion process begins, and you don’t know what information will be requested on a later page. A typical example is form L2P for reclaiming s 455 tax paid on loans to participators.
The work around is to complete the form with dummy data and screen print each page for future reference.
If you manage to reach the last page of the new online form, you are often faced with an instruction to print the form, sign it and send the signed hard copy to HMRC. However, the exact address to which the form must be sent remains a mystery. Examples include the R40 and R43 forms.
The necessary addresses for submitting form R40 are given on the webpage where the forms are found, but no on the actual form itself!
Occasionaly HMRC needs further information to be supplied in order to action the taxpayer’s request. We know that HMRC will ask for the information but there is no box on the form to submit it, and no means to attach the relevant document to the online submission of the form. An example of this is the online application for VAT registration.
Boxes too small
The HMRC forms design group obviously has a brief to consider only UK reference numbers when deciding how many digits each data box can cope with. Where a taxpayer has an overseas bank account, or perhaps a foreign registered company, the reference number may well be too long to fit in the designated box. Hence the form completion fails.
Sometimes HMRC asks the taxpayer (usually an employer) to submit a large volume of data in one go, such as for a section 16 return. In those cases HMRC will generally provide a template spreadsheet for the employer to use.
That works well when the employer can easily import the template and complete it using their standard software. Most large organisations use Microsoft software, so it makes sense that the section 16 template is a MS Excel spreadsheet.
So why is the “other employment related securities: end of year return template” in an OpenDocument format rather than MS Excel? The OpenDocument format is not necessarily compatible with Excel and it’s just another thing to frustrate the employer and their tax agent.
That particular spreadsheet template replaces the old Form 42, which in a straw-poll of tax advisers was voted the most hated HMRC form. Is it top of your “most hated” list?
Let me know which form (or template) is the worst HMRC form and why, by posting below. I will send a copy of Bloomsbury’s Tax Rates and Tables 2015/16 to the person with the best reason to hate a particular HMRC form.